Companies in a dilemma over who bears losartan recall cost

regarding request for companies to issue letter of commitment to paying for the exchange cost of losartan products

Goes against the claims made by the companies in trial…also concerns rise with the possibility of the burden increasing

Some companies undecided on whether to submit the letter of commitment…authorities urge prompt submission

Pharmaceutical companies are unsatisfied with the health authorities’ request for companies to fully bear the cost of exchanging ‘losartan’ products that were found to contain azido impurities.

 

While many companies have submitted the ‘cost-bearing letter of commitment,’ the companies have been left with a bitter aftertaste, due to the ongoing litigations and uncertainties on how much the exchanges will cost.

 

Some companies have not submitted the letter of commitment yet.

 

The Ministry of Food and Drug Safety had gathered the manufacturers and sellers of losartan products on the 29th of last month to request a ‘letter of commitment on bearing the cost,’ a commitment by the companies to bear the cost of exchanging, re-prescribing, and re-dispensing drugs that arise from recalls, saying that the cost should be borne by the pharmaceutical companies.

 

After receiving the request, over half of the companies have submitted their letter by the 30th, the deadline for submitting impurity test results.

 

Companies that submitted their letter of commitment did so because they do not expect the cost burden to be large, and that they could not disregard the government's request.

 

An official from a mid-grade pharma company said, “ We submitted the letter of commitment as requested because we expect the number of recalls to be small, the number of products exchanged or re-prescribed by consumers to be even smaller.” As only specific lot numbers in issue are subject to recalls this time without stopping reimbursement, the companies expect the number of consumer recalls to be smaller than that for valsartan or ranitidine.

 

In fact, the number of antihypertensive drugs that were recalled by consumers in September due to AZBT impurities was only 4, giving some credibility to these companies’ expectations.

 

However, as there were no re-prescriptions, re-dispensing, and no public promotion activities informing the people about the recalls then, other companies believe the larger amount of recalls would increase the cost incurred as well.

 

Another industry official said, “It may not have been so if the recalls were conducted quietly, but if the recalls become politicized, the cost of exchanging the products may grow bigger.

 

Most of the losartan products are prescribed for long-term use, for over a month, and may become a big burden for pharmaceutical companies.” Another issue is that the letter of commitment may affect the ongoing non-existence of a debt suit being conducted on valsartan products.

 

The suit arose after the National Health Insurance Service filed claims to pharmaceutical companies to retrieve the cost incurred while exchanging valsartan products that were found to have impurities.

 

Companies have asserted that the indemnity claims were excessive as the unexpected impurities were only found due to the development of science and were unavoidable as the drugs were manufactured due process.

 

However, the first trial court ruled in favor of NHIS and judged that a total of 2.03 billion won should be paid in claims for indemnity by 69 companies in September.

 

The companies appealed, and the lawsuit is now being tried in a second trial.

 

In this context, if the companies submit the ‘letter of commitment on bearing the cost,’ this contradicts the claims the companies had made at court and acknowledges indemnity.

 

This is highly like to negatively affect the outcome of the lawsuit.

 

This is why some companies have not been able to decide on whether to submit the letter of commitment.

 

Recently, the MFDS is known to have been urging pharmaceutical companies to promptly submit the letter of commitment.

 

A pharmaceutical company official said, “As the underdog, it would be difficult for us to reject the MFDS’ request.

 

However, it is an unjust procedure for the government to unilaterally decide on the bearer of the costs and notify and companies to submit a letter of commitment.” Meanwhile, the MFDS is expected to soon announce a list of high blood pressure losartan drugs that contain excess azido-based impurities and start recalls from pharmacies, distributors, and consumers.